Five small public accounting firms have become involved in an information project bytaking part in an inter-firm working paper review program.Under the program, each firm designates two partners to review the working papers,including the tax returns and the financial statements of another public accounting firmtaking part in the program. At the end of each review, the auditors who prepared theworking papers and the reviewers have a conference to discuss the strengths andweaknesses of the audit. They don’t obtain authorisation from the client before the reviewtakes place

Five small public accounting firms have become involved in an information project bytaking part in an inter-firm working paper review program.Under the program, each firm designates two partners to review the working papers,including the tax returns and the financial statements of another public accounting firmtaking part in the program. At the end of each review, the auditors who prepared theworking papers and the reviewers have a conference to discuss the strengths andweaknesses of the audit. They don’t obtain authorisation from the client before the reviewtakes place.Ethical issue: Confidentiality (APES110.114).Rules/regulations: APES110.114 The auditor must not disclose information about the client without specificpermissionfrom the client.Downloaded by Yuchen ZHAO ([email protected])lOMoARcPSD|3665272

.Question 3How is auditing related to accounting?

Which two requirements must accounting firms that audit public companies meet under the Sarbanes-Oxley Act?Choose 2 answers Firms must not provide certain nonaudit services to audit clients, such as management functions or legal services. Firms must not audit the same public company for more than five consecutive years. Firms must report to and be retained by the audit committee rather than the CFO or other company management. Firms must help to develop and enforce a code of ethics on audit clients.

Studying the client and industry allows an auditor to:Question 6AnswerSelect one:a.familiarise themselves with the client’s business and the industry in which it operates.b.gain an understanding of any accounting practices or transactions unique to that industry.c.assess the control environment and the attitudes and capability of senior management.d.All of the options are correct.

The Accounting firm appointed to act as auditors can also provide the following services EXCEPT A. Taxation B. Systems advisory C. Executive accounting functions D. Accounting E. Share valuations